ORDINANCE NO. BL2015-68
An ordinance amending Title 3 of the Metropolitan Code relative to employee benefits to allow assignment of retirement plans benefits pursuant to a qualified domestic relations order (“QDRO”).
WHEREAS, as of July 1, 2015, the State of Tennessee requires qualified retirement plans maintained by local governments to honor claims under qualified domestic relations orders (“QDROs”) if the order relates only to the provision of marital property rights for the benefit of the former spouse of a plan participant; and,
WHEREAS, it is appropriate for the Metropolitan Government to amend its retirement plans which are qualified plans under section 401(a) of the Internal Revenue Code to recognize QDROs in accordance with Tennessee law; and,
WHEREAS, the Employee Benefit Board has recommended the provisions set forth in this ordinance.
NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. Section 3.08.180 of the Metropolitan Code is hereby amended by deleting said section in its entirety and replacing it with the following:
3.08.180 - Plan benefits exempt from taxation, execution or assignment, except as required by state or federal law.
A. Except as provided in section 3.08.180 or as required by state or federal law, all benefits accrued or accruing to any member under the system, the contributions by members as well as by the Metropolitan Government and all other assets of the trust fund are and shall be exempt from any state, county or municipal tax and shall not be subject to execution, attachment, garnishment or any other legal process whatsoever, nor shall any assignment thereof be enforceable in any court; except, that levy of execution granted by a court of competent jurisdiction may issue against any of the assets described above in the event that a member does not repay social security taxes advanced for him by the Metropolitan Government in accordance with the provisions of section 3.08.150.
B. Beginning July 1, 2015 and as provided in T.C.A. section 26-2-105, the system will honor claims presented under a qualified domestic relations order (QDRO), if the order relates only to the provision of marital property rights for the benefit of the former spouse of a member. A QDRO is defined in section 414(p) of the Internal Revenue Code, subject to the limitations set forth in this subsection B. In addition, such order must apply only to benefits provided under one or more of the following plans within the system:
(i) The plan for pension benefits for credited employee service as provided in section 3.28.080, Chapters 3.32 and 3.40;
(ii) The plan for pension benefits for credited fire and police service as provided in section 3.28.080, Chapters 3.36 and 3.40;
(iii) The plan for pension benefits for credited employee service as provided in section 3.29.080, Chapters 3.33 and 3.40; or
(iv) The plan for pension benefits for credited fire and police service as provided in section 3.29.080, Chapters 3.37 and 3.40.
C. If a QDRO pertains to a member who has not commenced receiving benefits at the time the QDRO is received by the Board, the alternate payee under said QDRO may elect to begin receiving benefits pursuant to the order at any time after the member becomes eligible to request a distribution of benefits for the applicable plan, but not earlier than July 1, 2015. Such alternate payee may receive benefits in any form provided by the applicable plan, except a joint and survivor annuity. If a QDRO pertains to a member who is already receiving benefits under the plan, the alternate payee shall share in the payments being made to the member and shall not be allowed to change the payment method or the timing of the payments.
D. As provided in T.C.A. section 26-2-105, the system shall honor orders for assignment of support issued under T.C.A. section 36-5-501.
Section 2. This ordinance shall take effect from and after its final passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.
Sponsored by: Bill Pridemore, Kathleen Murphy, Brett Withers
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|Introduced:||December 1, 2015|
|Passed First Reading:||December 1, 2015|
|Referred to:||Budget & Finance Committee
|Passed Second Reading:||December 15, 2015|
|Passed Third Reading:||January 5, 2016|
|Approved:||January 6, 2016|
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